Currently, if your business does not want to conduct business for some reason, your business can apply for a temporary suspension. This kind of legal status brings many benefits to businesses when they face difficulties such as simple procedure, low cost, ability to transfer the company after the suspension period… However, when carrying out procedures for the business suspension, you need to pay attention to the related regulations prescribed by the law. So, in this article LSX legal firm introduces: “The latest regulations on business suspension in Vietnam”
Legal grounds
- Law on Enterprise 2020
- Decree 01/2021/ND-CP
Regulations on the concept of business suspension
Business suspension: the legal status of an enterprise that when temporarily suspends its business in accordance with the law. The business suspension status change from active to inactive when the enterprise registers to start suspending business. The end date of business suspension is the end date of the business suspension period announced by the enterprise, or the date the enterprise registers to continue its business before the announced time limit.
Accordingly, Article 206 of the Law on Enterprise 2020 stipulates about “business suspension” as:
“Article 206. Business suspension and termination
1. The enterprise shall send a written notice to the business registration authority at least 03 working days before the date of suspension or resumption of operation.
2. The business registration authority and competent authorities are entitled to request an enterprise to suspend or terminate its business operation in the following cases:
a) The enterprise that does not fully satisfy the conditions for doing business in restricted business lines must suspend or terminate business operation in the corresponding business lines.
b) Relevant authorities request the suspension in accordance with regulations of law on tax administration, environment, and relevant laws;
c) Operation in one or some business lines have to be suspended or terminated under a court decision.
During the temporary suspension, the enterprise must fully pay unpaid taxes, social insurance, health insurance, and unemployment insurance and perform contracts with customers and employees, except for the following cases: Enterprises, creditors, customers, and employees have other agreements. “
Regulations on conditions for business suspension
To apply for the business suspension procedure, your business must meet the following two conditions:
- At the time the enterprise registers to suspend its operation, the enterprise’s tax code must still active. Therefore, if you want to register for business suspension, your business must restore the tax code if the tax authorities closed your tax code.
- Enterprises must notify business suspension to the business registration office 3 days in advance.
Regulations on business suspension time
The duration of the business suspension shall not exceed 1 year. After the notice period expires, if the enterprise, branch, representative office, or business location continues to suspend business, then it must further notify the Business Registration Office. Similarly, the extension period must not exceed 1 year.
Thus, the maximum consecutive suspension period cannot exceed 2 years.
Dossier for registration of business suspension
When you want to register for business suspension, your business needs to prepare the following documents:
1. Before 03 working days, your business must send a Notice to the Business Registration Office in the following cases:
- The enterprise suspends business or resumes business before the announced time limit.
- The enterprise wants to continue to suspend business after the notice period expires.
2. Resolution, decision, and copy of meeting minutes of:
- Board of Members, for limited liability companies with two or more members; partnerships.
- Board of Directors for joint-stock companies.
- Company owner for single-member limited liability companies.
3. Authorization letter for the applicant or organization providing the application submission service.
Regulations on business suspension procedures
According to the latest regulations on business suspension, in order to conduct business suspension procedures, there are three steps to follow:
Step 1: Prepare the appropriate dossiers for the suspension application of your company.
Step 2: Submit a business suspension application to the Department of Planning and Investment.
Your business needs to submit a set of documents according to the above instructions to the Business Registration Office – Department of Planning and Investment where the business is located. The Business Registration Office hands over the application receipt to the enterprise after receiving the notice of business suspension.
Step 3: Receive results
- Within 02 working days, the Department of Planning and Investment will send information to the tax party to check whether the company has tax owed or not.
- Within 03 working days from the date of receiving the valid application, the Business Registration Office shall issue a Certificate of the enterprise’s business suspension registration.
Business suspension service of LSX Legal Firm
Business suspension-a necessary solution for businesses when they cannot continue doing business for a specified period of time. Suspending business quickly will help businesses avoid unnecessary costs. Meanwhile, the business suspension process contains complicated procedures so if businesses do it themselves, they will face many risks. Using the business suspension service of LSX will make you feel secure in each stage of implementation.
To make your case more convenient, LSX will perform:
- Legal advice related to new regulations in business suspension;
- Representing in drafting and editing documents;
- We commit the papers to be valid, and legal for use in all cases;
- Represent to submit documents, receive results, and hand them over to customers.
With a team of experienced, reputable, and professional consultants; The firm is always ready to support and work with clients to solve legal difficulties.
Furthermore, using our service, you do not need to do the paperwork yourself, We guarantee to help you prepare documents effectively and legally.
Also, you will not have to waste time preparing the application, submitting application, or receiving results. At those stages, we will help you do it smoothly.
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
- How to extend the business suspension?
- Notice form of business suspension in Vietnam
- Procedures for business suspension of partnership in Vietnam
Related questions
According to Article 57 of Decree No.78/2015/ND-CP on Enterprise Registration:
In case an enterprise or a branch, representative office, or business location suspends its business or resumes its business ahead of the notified schedule, it shall send to the business registration section with which the enterprise or its branch, representative office, or business location has made registration at least 15 days before the date of business suspension or resumption.
Besides, the business suspension period must not exceed one year. After this notified period, if the enterprise or its branch, representative office, or business location still suspends its business, it shall send another notice thereof to the business registration section. The total period of continuous business suspension must not exceed two years.
Notice of business suspension of the company for the second time (by sample);
Minutes of meetings of the Board of members (LLCs with 2 or more members); Minutes of the meeting of the company’s shareholders (joint-stock company);
The decision of the company owner on business suspending (1-member limited liability company);
The decision of the Board of members (LLCs with 2 or more members); Decision of the Administrative Council of the company (Joint-stock company);
Power of attorney or authorization contract for an individual/organization to carry out business suspension procedure
Business households that violate regulations on notification of business suspension may subject to a warning; a fine from 500,000 VND to 2,000,000 VND; and may have the business household registration certificate revoked.
Contact LSX
Finally, hope this article is useful for you to answer the question about “The latest regulations on business suspension in Vietnam?”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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